Financial Data and Key Metrics Changes - Freshworks achieved profitability for the first time in its history, generating record free cash flow in 2025, with a free cash flow margin of 25% [5][24][29] - Q4 total revenue increased to $222.7 million, growing 14% year-over-year on an as-reported basis and 13% on a constant currency basis [20] - Annual recurring revenue (ARR) ended at $907 million, representing 18% growth year-over-year on an as-reported basis [9] Business Line Data and Key Metrics Changes - Employee Experience (EX) business reached approximately $510 million in ARR, representing 26% year-over-year growth on an as-reported basis [21][10] - Customer Experience (CX) business ended the year with $395 million in ARR, reflecting year-over-year growth of 9% on an as-reported basis [21][16] - Device42 ended 2025 with over $40 million in ARR, with a 30% attach rate to top new EX deals [11][21] Market Data and Key Metrics Changes - Over 1,500 customers now contribute more than $100,000 in ARR, representing a 28% year-over-year growth [9] - The number of customers contributing more than $50,000 in ARR grew 23% year-over-year [26] - Net dollar retention rate was 108% on an as-reported basis, with expectations to improve to approximately 105% in Q1 2026 [25][44] Company Strategy and Development Direction - Freshworks aims to expand its EX business and monetize AI at scale, targeting $100 million in AI-driven ARR by 2028 [17][14] - The acquisition of FireHydrant is expected to enhance IT operations management capabilities and open an $8 billion addressable market [12][34] - The company is focused on integrating its product offerings to provide a unified service operations platform for IT teams [13][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth and profitability, projecting revenue growth of approximately 13.5%-14.5% for the full year 2026 [33][32] - The company anticipates continued demand for its EX solutions, particularly in the mid-market segment [72][73] - Management highlighted the importance of AI in driving customer satisfaction and operational efficiency [15][59] Other Important Information - Freshworks generated $56.2 million in free cash flow in Q4, outperforming expectations due to strong cash collections [28] - The company ended the year with nearly $844 million in cash, cash equivalents, marketable securities, and restricted cash [30] Q&A Session Summary Question: What factors are creating headwinds on the CX side of the business? - Management noted that the focus has been on EX, and the unification of conversational and ticketing capabilities is expected to drive faster growth in CX [39][40] Question: How should we think about the attach rate for Device42 trending? - Management indicated that Device42 is integral to the growth of the EX business and is expected to drive retention and expansion [50][51] Question: What are the expectations for Freddy AI's contribution to growth? - Management reported that Freddy AI has crossed $25 million in ARR and is expected to continue driving growth as capabilities improve [58][60] Question: How does the company view its guidance compared to previous years? - Management expressed confidence in the current guidance, reflecting strong momentum in the EX market and a clear strategy for growth [62][63]

Freshworks (NasdaqGS:FRSH) Q4 2025 Earnings call February 10, 2026 05:00 PM ET Company ParticipantsDennis Woodside - CEO and PresidentKate Skolnick - VP of Investor RelationsTyler Sloat - COO and CFOConference Call ParticipantsAlex Zukin - AnalystAustin Cole - AnalystBilly Fitzsimmons - AnalystDavid Hynes - AnalystJonathan Macari - AnalystOscar Saavedra - AnalystRob Oliver - AnalystScott Berg - AnalystTaylor McGinnis - AnalystOperatorHello, everyone. Thank you for joining us, and welcome to the Freshworks f ...

Freshworks (NasdaqGS:FRSH) Q4 2025 Earnings call February 10, 2026 05:00 PM ET Speaker7Hello, everyone. Thank you for joining us, and welcome to the Freshworks fourth quarter and full year 2025 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Kate Skolnick, VP of Investor Relations. Please g ...

This presentation contains "forward-looking" statements within the Private Securities Litigation Reform Act of 1995 that are based on our management's current expectations and projections about anticipated future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. Other than statements of historical facts, all statements contained in this presentation, includ ...

Core Insights - Freshworks Inc. reported strong financial results for Q4 and fiscal year 2025, exceeding revenue and operating margin guidance, with a year-over-year revenue growth of 16% [1][5][8] - The company’s EX business achieved over $500 million in annual recurring revenue, indicating significant growth in this segment [1] Financial Performance - **Q4 2025 Results**: Total revenue reached $222.7 million, a 14% increase from $194.6 million in Q4 2024. Adjusted for constant currency, the growth was 13% [5][37] - **Operating Income**: GAAP income from operations was $39.7 million, with an operating margin of 17.8%, compared to a loss of $23.8 million and a margin of (12.2)% in Q4 2024 [5][37] - **Net Income**: GAAP diluted net income per share was $0.67, up from a loss of $(0.07) in Q4 2024 [5][9] - **Cash Flow**: Net cash provided by operating activities was $62.3 million, representing a margin of 28.0%, compared to $41.4 million and a margin of 21.3% in Q4 2024 [5][9] Full Year 2025 Summary - **Total Revenue**: For the full year, revenue was $838.8 million, a 16% increase from $720.4 million in 2024 [5][37] - **Operating Income**: GAAP income from operations was $13.2 million, with a margin of 1.6%, compared to a loss of $(138.6) million and a margin of (19.2)% in 2024 [5][37] - **Non-GAAP Income**: Non-GAAP income from operations was $178.0 million, with a margin of 21.2%, up from $99.1 million and a margin of 13.8% in 2024 [5][37] Customer Metrics and Business Highlights - The number of customers contributing more than $5,000 in annual recurring revenue (ARR) increased by 10% year-over-year to 24,762 [10] - The net dollar retention rate improved to 108%, compared to 105% in Q3 2025 and 103% in Q4 2024 [10] - Freshworks announced the acquisition of FireHydrant to enhance its IT Service Management offerings [10] - New product capabilities were launched, including Freshdesk Command Center and Freddy AI Insights, aimed at improving customer experience [10] Financial Outlook - For Q1 2026, Freshworks expects revenue between $222.0 million and $225.0 million, with year-over-year growth of 13% to 15% [8] - For the full year 2026, revenue is projected to be between $952.0 million and $960.0 million, with growth of 13.5% to 14.5% [8]

Group 1 - Freshworks Inc. (NASDAQ:FRSH) is recognized as a strong software application stock by hedge funds, with Wells Fargo maintaining an Equal Weight rating and a target price of $13, indicating a potential upside of nearly 15% for investors [1] - Recent price increases for Freshdesk plans have resulted in double-digit percentage hikes across all tiers, which could contribute an additional 3% growth for the business in FY26 [2] - Needham has a bullish outlook on Freshworks, assigning a Buy rating with a target price of $25, suggesting a significant upside potential of 121% [2] Group 2 - There is strong demand anticipated for Freshservice, Freshworks' IT service management platform, due to its user-friendly features and competitive pricing, particularly in up-market segments [3] - Freshdesk, the customer service software, is experiencing stable demand, while early adoption of Freddy AI across both platforms is expected to provide automation benefits and a competitive advantage [3] - Freshworks specializes in cloud-based SaaS solutions, focusing on AI-enabled offerings for IT service management, customer experience, and sales & marketing, serving a wide range of clients from startups to large enterprises [4]

Freshworks to Deepen its IT Service and Operations Portfolio with Acquisition of FireHydrant Freshworks has signed a definitive agreement to acquire FireHydrant, a provider of AI-powered Incident Management software. The combination will bring together Freshservice’s IT Service Management (ITSM) and FireHydrant’s core IT Operations Management (ITOM) as a unified AI-native ServiceOps solution designed to simplify operations, proactively prevent disruptions, and ensure exceptional IT service reliability. ...

Core Insights - Freshworks Inc. has introduced new capabilities in its Freshservice platform aimed at simplifying enterprise service delivery, modernizing IT, and enhancing employee trust [1][4] Group 1: Product Enhancements - The launch includes enhancements to Freshservice and Freddy AI, improving employee experience (EX) and service delivery through effortless self-service and real-time device health insights [2] - AI-powered Intelligent Routing in Freshservice ensures tickets are directed to the appropriate team instantly, enhancing resolution speed and employee experience [2] - Freddy AI Insights now provides IT leaders with conversational insights to visualize complex service patterns and quickly identify root causes [2][7] Group 2: Addressing Complexity in IT - Freshworks' Cost of Complexity Report indicates that nearly 20% of IT leaders have faced burnout or attrition due to complex software, with 29% of employees reporting productivity loss from bloated tools [3] - The report identifies business software as the primary driver of organizational complexity [3] Group 3: Proactive Issue Resolution - DEX integrations with Riverbed Aternity and ControlUp allow for the detection and resolution of endpoint issues before employees notice them, providing immediate visibility into system health [5] - AI-powered Intelligent Routing helps assign tickets based on team availability, skill, and workload, improving issue resolution efficiency [5] Group 4: Enhanced Employee Support - Enhanced Freddy AI Agents can now search Google Drive and process images within tickets, integrating seamlessly with popular applications like Microsoft 365 Copilot [6] - Freshservice's multilingual knowledge base allows users to access helpful articles in their preferred language, improving self-service capabilities [6] Group 5: Performance Recognition - Freshservice has been recognized as a Strong Performer in The Forrester Wave™: Enterprise Service Management Platforms, Q4 2025, receiving high scores in various criteria [8] - Customers have praised Freshworks for its ease of use, intuitive design, and robust API capabilities, contributing to improved incident management and resolution times [8]

Core Insights - Freshworks reported a 15% year-over-year revenue growth for Q3 2025, reaching $215.1 million compared to $186.6 million in Q3 2024 [1] - The company narrowed its net loss to $4.6 million from $30 million in the previous year, while GAAP loss from operations improved to $7.5 million from $38.9 million [1] Financial Performance - Freshworks raised its full-year revenue guidance to $833.1-$836.1 million, up from the previous estimate of $822.9-$828.9 million, driven by enterprise adoption of AI [2] - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $813.2 million [2] Customer Metrics - The number of customers contributing more than $5,000 in annual recurring revenue (ARR) increased by 9% year-over-year to 24,377 [4] - The net dollar retention rate was 105%, slightly down from 107% in Q3 2024 [4] - Freddy AI products saw a doubling in annual recurring revenue year-over-year [4] Product and Market Expansion - Freshworks onboarded new customers including AllSaints/John Varvatos, Apollo Tyres, and Société Générale [5] - The company expanded its Enterprise Service Management (ESM) offerings, with ESM annual recurring revenue surpassing $35 million in Q3 2025 [5] Market Performance - Freshworks shares have declined approximately 32% since the beginning of the year, while the S&P 500 has gained 15% [6] - Following the earnings report, Freshworks shares rose by about 1.2%, closing at $11.06 on the Nasdaq [6]

Financial Performance - Freshworks' Q3 2025 revenue reached $215.1 million, representing a year-over-year growth of 15% [24] - The company's non-GAAP income from operations for Q3 2025 was $45.2 million [38] - Freshworks generated $57.2 million in free cash flow during Q3 2025 [42] - The company anticipates revenue between $217.0 million and $220.0 million for Q4 2025, projecting a full-year 2025 revenue of $833.1 million to $836.1 million [44] Customer Base and Retention - Freshworks has nearly 75,000 paying customers across over 120 countries [13] - Net dollar retention rate for Q3 2025 was 104% [36] - Customers contributing more than $5,000 in ARR reached 24,377 in Q3 2025 [32] - The number of customers with >$50K ARR was 3,612 in Q3 2025 [32] Regional Revenue Distribution - North America accounts for 39% of Freshworks' revenue [27] - Europe, the Middle East, and Africa (EMEA) contribute 47% to the company's revenue [27]